GREAT COMPUTERS Case Solution & Answer

Great computers Case Solution

The first fault of Great Computers is that it is not giving proper consideration to markets except for North America and China;there may be more geographically dispersed locations where it can get the maximum market share by giving proper attention such as Europe.

The second weakness of Great Computers is that the revenues and profits are declining every year, this is an alarming situation for the management of Great Computers which can be due to increased competition. The increased competition is not the sole reason for this decline, there can be many more reasons which aided to this situation such as poor quality of the systems of Great Computers and poor after sales services and increased prices.

It is indicated by the case study that Great Computers has a poor record of sales through retail stores; this suggests the weak distribution system of Great Computers.This decrease can be more dangerous for the company if the management does not give it proper consideration.

Another weakness of Great Computers is that the material cost is too high. 70% of total cost of the system consists of material cost which seems to be too high. This high material cost has several consequences on the profitability of Great Computers. The high material cost also indicates that Great Computers might pay its suppliers too late and the suppliers compensate this late payment by increasing the price of materials.This delay might also mean the weak liquidity of Great Computers.

The products of Great Computers appear to be very similar to the products of its competitors; Almost all the brands are offering the same kind of goods in the technological market. It can be very dangerous for Great Computers for not having any point of differentiation in its products. Great Computers charge more than the many of their competitors; they will switch o another brand where they can find some feature more innovative.

The case study scenario suggests that Great Computers does not have a good record in managing the subsidiaries and it lacks the handling expertise which are essential for the sound management of acquired companies. The track record of Great Computers is not up to the mark in managing the subsidiaries which may make it less attractive to buy a well established company’s product, which is quite essential in this challenging trading environment.

Opportunities:

The main opportunity that lies with Great Computers is that it can bring some innovation in its products to attract the customers and to capture the desired market share. The fact that Great Computers is a huge company and might possess vast financial resources will help the company to increase expenditure in the research and development department which then aims to bring innovation to the systems and products of Great Computers. Some businesses that are operating in the same industry have also exploited this strategy to stay ahead of its competitors.

Great computers can enter into acontract with the suppliers of its materials for giving the company early payment discounts which could result in the reduction in costs and increase the profits. Also,Great Computers can negotiate with the suppliers to avail the bulk purchase discount, this strategy also aims to reduce the material cost but will increase the holding cost of the material.

Great Computers can relocate its production line to countries where the skilled labor is quite cheap, In recent severe economic conditions, many companies have also relocated their manufacturing plants to the developing countries. Where there are cheap property rentals and cheap labor available, Also in many of the less developed countries and developing countries there issmall corporation tax. Furthermore, the governments of those countries give many benefits to the foreign multinational companies for operating from home. But the main disadvantage of relocation is that global customers might perceive it as unethical because the relocation will result in the redundancies of local people of aparticular country and the government might also oppose this strategy because of the loss of taxes.

The case study scenario suggests that there is an increase in competition in the high technology market which is affecting the performance of many companies operating in this sector. There is an attractive opportunity for Great Computers is to acquire one of its competitors.The acquisition will result in many benefits for Great Computers. Firstly the acquisition will lead to the reduction of competition from the market. Secondly it will also allow Great Computers to take advantage of economies of scale;Great Computer can negotiate better with its suppliers because after the acquisition it will be the bigger company than it was before theacquisition. Furthermore, it can also take advantage of the technologies of the acquired company which can also make it easier to bring innovation in the products.

There is a considerable opportunity for Great Computers to expand its operations to other markets in the world. Now Great Computers is primarily operating in North America, China and India while there are many more markets other than these countries where there is a great demand for the products of Great Computers. Capturing the markets in those countries will allow Great Computers to make its brand more accessible and approachable to the customers based in Europe and other parts of the world. Operating in many geographical locations will allow Great Computers to hedge itself against the adverse movements in the industry because it might compensate it with another country………………….

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